From poverty to power - Oxfam-Québec
From poverty to power - Oxfam-Québec From poverty to power - Oxfam-Québec
3 POVERTY AND WEALTH LIVING OFF THE LANDamong recalcitrant aid donors, and especially at the negotiating tableswhere trade and investment agreements are hammered out. All suchaccords curb the scope for state intervention in the economy. Tradenegotiations must catch up with the new thinking on agriculture andthe role of the state, or they will risk binding countries irreversiblyinto agreements that could undermine their long-term development(see Part 5).The answer to rural poverty and inequality is not to give up on thestate, but to reform and enhance its support for agriculture and smallfarmers, especially in the early stages of development, as well as to curbthe proclivity of governments and large landowners for intervening inways that undermine poor farmers. Studies of successful agriculturaltake-offs show that the process of transformation must be ‘kick-started’with the assistance of government interventions. In India, for example,subsidies on credit, fertiliser, and seeds were effective, as were extensionservices such as training in new technologies and techniques, statespending on irrigation and roads, and steps to curb the volatility ofprices paid to farmers. 75 By reducing risks to producers, such measuresencouraged them to invest in their farms.Malaysia’s transformation from agricultural economy to manufacturingexporter in the space of three decades was built on effectivestate intervention in agriculture. This pursued twin objectives: tostabilise rice prices and improve the incomes of the country’s millionsof small rice farmers, and to generate revenues from exports such asrubber and palm oil. For rice, the government provided input subsidies,particularly for fertilisers, and made large investments in irrigationand land development, especially during the early years. It also guaranteeda floor price for producers, in contrast with other countries thatsqueezed rural producers in order to keep prices low for urban workers.Outputs and yields responded by growing rapidly during the 1970s,reducing poverty and the risk of inter-ethnic conflict, while exporttaxes helped to fund the country’s industrialisation. 76In recent years, Malawi has shown what state action can achieve interms of poverty reduction, if not yet in terms of broader economictake-off. After a series of poor harvests left almost five millionMalawians facing food shortages, the government defied pressurefrom the country’s aid donors and introduced subsidies on seeds and141
FROM POVERTY TO POWERfertilisers to pre-empt famine. The results were spectacular, more thandoubling the national maize harvest and averting widespreadhunger. 77Governments also need to address the need of small farmers forsecure title to their land, especially for women (who in many caseshave never enjoyed independent rights to the land), includingthrough land reform where necessary. (Land rights are discussedmore fully in Part 2.)As noted above, governments need to support research and developmentto produce the kinds of seeds and other technologies that smallfarmers need. Despite the much greater importance of agriculture totheir societies, developing countries invest only one-ninth of whatindustrial countries put into agricultural R&D as a share of agriculturalGDP (including both public and private sources). 78 Much of thatis geared to large-scale export agriculture with limited relevance tosmall farmers. Seventy per cent of global R&D on agriculture is undertakenby profit-driven transnational corporations. 79Yet public sector R&D has clearly worked. The publicly fundedConsultative Group on International Agricultural Research (CGIAR),the international network of agricultural research institutes thatspearheaded the Green Revolution, has released more than 8,000improved crop varieties over the past 40 years.Successful state intervention can benefit consumers too, byenabling farmers to increase productivity, selling cheaper but stillmaking a better living. Between 1980 and 2000, the Green Revolutionin Bangladesh meant that the real wholesale price of rice in Dhaka’smarkets fell from Tk.20 to Tk.11 per kilo. But over the same period,farmers increased yields from around 2 tonnes to 3.4 tonnes perhectare, effectively offsetting the impact of falling prices on theirincomes. 80Balancing the needs of producers and consumers is one of the coreroles of the state in regulating agricultural markets. Drastic changes infood prices, such as the recent surge in prices discussed on page 227,have a complex impact on poverty, depending on the balance ofproduction and consumption in any given household. Many poorfarmers are actually net consumers. One study estimates that 70–80142
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FROM POVERTY TO POWERfertilisers <strong>to</strong> pre-empt famine. The results were spectacular, more thandoubling the national maize harvest and averting widespreadhunger. 77Governments also need <strong>to</strong> address the need of small farmers forsecure title <strong>to</strong> their land, especially for women (who in many caseshave never enjoyed independent rights <strong>to</strong> the land), includingthrough land reform where necessary. (Land rights are discussedmore fully in Part 2.)As noted above, governments need <strong>to</strong> support research and development<strong>to</strong> produce the kinds of seeds and other technologies that smallfarmers need. Despite the much greater importance of agriculture <strong>to</strong>their societies, developing countries invest only one-ninth of whatindustrial countries put in<strong>to</strong> agricultural R&D as a share of agriculturalGDP (including both public and private sources). 78 Much of thatis geared <strong>to</strong> large-scale export agriculture with limited relevance <strong>to</strong>small farmers. Seventy per cent of global R&D on agriculture is undertakenby profit-driven transnational corporations. 79Yet public sec<strong>to</strong>r R&D has clearly worked. The publicly fundedConsultative Group on International Agricultural Research (CGIAR),the international network of agricultural research institutes thatspearheaded the Green Revolution, has released more than 8,000improved crop varieties over the past 40 years.Successful state intervention can benefit consumers <strong>to</strong>o, byenabling farmers <strong>to</strong> increase productivity, selling cheaper but stillmaking a better living. Between 1980 and 2000, the Green Revolutionin Bangladesh meant that the real wholesale price of rice in Dhaka’smarkets fell from Tk.20 <strong>to</strong> Tk.11 per kilo. But over the same period,farmers increased yields from around 2 <strong>to</strong>nnes <strong>to</strong> 3.4 <strong>to</strong>nnes perhectare, effectively offsetting the impact of falling prices on theirincomes. 80Balancing the needs of producers and consumers is one of the coreroles of the state in regulating agricultural markets. Drastic changes infood prices, such as the recent surge in prices discussed on page 227,have a complex impact on <strong>poverty</strong>, depending on the balance ofproduction and consumption in any given household. Many poorfarmers are actually net consumers. One study estimates that 70–80142